Great points.

I wonder when the SaaS industry, and the players in it, grow to a point that Microsoft may have a hard time entering? At what point will it be “too late” for Microsoft and other traditional software companies to suddenly wake up and join the paradigm shift?

I don’t think we’re anywhere near that point now, but what about in 5 to 7 years as these SaaS companies are upgrading their applications 3 to 8 times per year?

I think CIO’s may also find themselves behind the eight ball if the SaaS industry progresses and they have ignored the opportunity to lower costs, etc. CEO’s may be looking for the competitive advantage SaaS brings, which could put a CIO’s position in jeopardy.

Regardless, it will be an interesting few years as this shift toward SaaS slowly asserts itself on IT departments and traditional software companies. This shift is certainly uncomfortable and many will try to avoid it, but I think one could make the argument that this transformation is inevitable.

Also CIO officers arent about to vote themselves out of work by outsourcing thier needs offsite to 3rd parties. Ultimatly the transition to enterprise SAAS will be slowed by CIO’s unwillingness to cede authority.